Risk Alert: Marketing Rule Findings
Main Contributor: Elizabeth Cope, CPA, CSCP, CIPM, CEO & Lead Consultant
A New Risk Alert
The SEC issued a Risk Alert on December 16, 2025 outlining observations from examinations focused on advisers’ compliance with the Marketing Rule. These findings align with what we continue to see during examinations – the Marketing Rule remains a consistent area of regulatory focus.
This is a must-read for every advisor to confirm whether your firm is compliant. Risk Alerts serve as an important regulatory signal. Once the SEC publicly identifies common deficiencies, advisers are on notice and examiners are less likely to be forgiving when similar issues arise during future examinations. This makes the Risk Alert essential reading for advisers seeking to validate their current compliance posture.
Testimonials and Endorsements
The Risk Alert highlighted several recurring deficiencies related to testimonials and endorsements. One of the more notable themes involved advisers offering gift cards, fee rebates, or other de minimis compensation in connection with referrals, testimonials, or third-party reviews.
Key Observations Included:
The most common deficiency involved failing to provide required disclosures at the time the testimonial or endorsement was disseminated.
Many advisers used lead generation services, social media influencers, referral networks, or “refer a friend” programs involving de minimis compensation without recognizing that these arrangements still constituted testimonials or endorsements subject to the Marketing Rule.
In some cases, advisers provided gift cards to clients in exchange for reviews on third-party websites without establishing a reasonable basis that the testimonial complied with disclosure requirements.
Some advisers had not updated their policies and procedures to address the Marketing Rule’s testimonial and endorsement provisions.
Required disclosures were often missing, incomplete, or not presented in a clear and prominent manner, including disclosures provided through hyperlinks or smaller or lighter font than the testimonial itself.
When using promoters, advisers frequently failed to disclose the material terms of the compensation arrangement or conflicts of interest arising from the relationship, including situations where the promoter had a financial interest in the adviser.
Advisers did not always enter into required written agreements when compensation exceeded the de minimis threshold, or the agreements failed to fully describe the scope of services and compensation terms.
When affiliated entities acted as promoters, advisers did not clearly disclose the nature of the relationship, resulting in improper reliance on disclosure exemptions.
Advisers failed to comply with the ineligible person provisions, either by not exercising reasonable care to identify ineligible promoters or by compensating individuals they knew, or should have known, were ineligible.
Third-Party Ratings
The SEC observed similar issues related to third-party ratings. Common deficiencies included missing or unclear disclosures and outdated policies and procedures.
Additional Observations Included:
Disclosures related to third-party ratings were not always presented in a clear and prominent manner and were sometimes provided through hyperlinks.
Disclosures were incomplete or missing.
Advisers failed to establish a reasonable basis for believing that third-party ratings were designed to prevent predetermined or biased results, as required under the rule.
Conclusion
Advisers should take this opportunity to revisit their policies and procedures to ensure they fully address the Marketing Rule’s requirements. Firms should also train relevant personnel so they understand when testimonials, endorsements, and third-party ratings are triggered and what disclosures are required.
Marketing materials should be reviewed holistically to confirm that required disclosures are complete, clear, and presented prominently. Addressing these issues proactively can significantly reduce examination risk.